Gold prices suffered their biggest decline in more than three years as investors sold into what had been a blistering rally in the precious metal.
The price sunk $104.20, or 5.6%, to $1,754.10 an ounce in regular futures trading on Wednesday, the lowest since Aug. 12. But gold is still up 24% this year. Other precious metals also fell, with silver down $3.12, or 8.3%, to $39.16.
Investors have streamed into gold as fears that the economy could be heading back into a recession have torpedoed equities. Wall Street has been extremely volatile this month, and the big stock market swings have pushed some investors into relatively safer picks such as gold.
However, there was some uplifting economic data released Wednesday that helped ease investors' jitters and pushed them back into stocks. The Dow Jones industrial average added 1.3% during the session.
The record run for gold has caught the attention of more than just Wall Street. A financial-industry regulatory group warned investors Wednesday that scam artists have also become enamored of gold.
As the price of gold pushed to a series of record highs this year, various scams have been hatched to lure unsophisticated small investors, the Financial Industry Regulatory Authority said on its website. "Even a cursory Internet search will pull up numerous websites, blog posts, investment newsletters and social media posts (including YouTube videos and Tweets) devoted to the topic of investing in gold," the warning says. "But some of the stocks and opportunities being promoted have precious little value, and others are outright frauds."
Authorities already have cracked down on a number of scams.
The Securities and Exchange Commission brought action against a Florida company that claimed a mining project in Ecuador had turned up gold reserves worth more than $1 billion.
In another case, the agency alleged that a Ponzi scheme bilked 3,000 investors out of $300 million. The six people charged with running the scam used free-lunch seminars to entice victims to invest retirement savings and home equity, according to the SEC.
Investors should be dubious of claims that a company's stock price is certain to rise simply because gold prices are going up, according to the FINRA warning.
People also should be wary of companies that alter their names to associate them with gold, according to FINRA. For example, a company that claimed to do gold mining was formerly in the golfing business.